Buy vs Rent Calculator: The 12 Variables That Actually Matter
Quick Answer
A complete buy vs rent calculation requires 12 inputs: purchase price, down payment, mortgage rate, term, property tax rate, insurance, HOA, maintenance reserve, expected appreciation, alternative investment return, annual rent, and expected rent growth. Most online calculators include only 5–6 of these, leading to systematically biased results.
The buy vs rent decision is fundamentally a net present value calculation. You are comparing two cash flow streams over your expected holding period. Most popular calculators oversimplify this in ways that systematically favour buying.
The three most commonly omitted variables: (1) Opportunity cost of down payment — your down payment capital earns nothing if locked in home equity. A $100,000 down payment in a diversified portfolio earning 7% generates $7,000 per year. (2) Maintenance reserve — budget 1–2% of home value annually for repairs and upkeep. On a $400,000 home, that is $4,000–$8,000 per year, a cost renters avoid entirely. (3) Transaction costs — buying and selling a home costs 7–10% of value between agent commissions, stamp duty/transfer taxes, and closing costs. This cost must be amortised over your holding period.
BuildIQ's analysis engine includes all 12 variables and applies local market data — current rental comps, historical appreciation rates, and actual property tax assessments — to produce a personalised break-even timeline for any address.
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